How much Mediclaim is Necessary for a Layman in India

*By CA Neha Sunil Vora*

*Chartered Accountant & CEO, Renatus Cancer Centre*

*Why Mediclaim is No Longer Optional*

In my professional journey across finance and healthcare, one reality has become very clear — **a medical emergency is not just a health crisis, it is a financial crisis.**

Healthcare costs in India are rising sharply, and most people are still underprepared.

Today:

* A basic hospitalization in a private hospital can cost ₹1–3 lakh

* Surgeries can go up to ₹5–10 lakh

* Critical illnesses can cost ₹10–25 lakh or more

For a layman, these are not small numbers. These are life-altering expenses.

Without proper mediclaim, people are forced to break savings, liquidate investments, or take loans at the worst possible time.

*The Reality Most People Ignore*

Despite rising costs, a large number of individuals still:

* Rely only on employer-provided insurance

* Take minimal coverage of ₹2–3 lakh

* Or postpone buying insurance altogether

This approach is financially risky.

Medical inflation in India is approximately **10–15% every year**. This means healthcare costs are doubling much faster than most incomes.

*A Ground Reality from Healthcare*

As the CEO of a Renatus cancer centre, I have seen situations that numbers alone cannot explain:

* Families delaying critical treatments due to lack of funds

* Patients worrying more about bills than recovery

* Years of savings getting exhausted within a few months

In cases like cancer, treatment costs can range from ₹5 lakh to ₹25 lakh or even higher depending on complexity.

At such times, mediclaim is not just a financial tool ,it becomes a lifeline.

What seems “sufficient” today can become completely inadequate tomorrow.

 *A Practical and Smarter Approach*

From a financial planning perspective, health insurance should be structured, not randomly purchased.

A more practical approach is:

* Maintain a base policy of ₹5–10 lakh

* Supplement it with a super top-up plan of ₹15–20 lakh

This structure ensures higher protection without putting pressure on your annual premium outflow.

 *What You Must Evaluate Before Buying Mediclaim*

A well-informed decision is more important than a quick decision.

Before choosing a policy, carefully evaluate:

* Room rent limits and hidden caps

* Waiting periods for pre-existing diseases

* Claim settlement track record of the insurer

* Coverage for major and critical illnesses

A policy that looks affordable but fails at the time of need is not a good policy.

*Final Perspective*

As a Chartered Accountant, I strongly believe in *wealth creation*.

As someone working closely in healthcare, I strongly believe in **wealth protection.**

Ignoring health insurance is not saving money — it is exposing yourself to financial uncertainty.

 One Line to Remember

**“You can rebuild wealth, but a medical emergency should not be allowed to destroy it.”**

8 INCOME TAX RULES that are Changing from April 1

 

1] New Income tax regime to be a default regime: New tax regime will take over as the primary tax regime on April 1, 2023. Tax assessors will still have the option of using the old tax Regime.

2] Tax rebate limit raised to Rs. 7 lakhs: Increase in the tax rebate cap from 5 to 7 lakh means that individual with incomes under 7 lakhs do not need to make any investments to qualify for exemptions.

3] Standard deduction: Standard deduction of Rs 50,000 that was offered to employees under the old tax regime remains unchanged. The finance minister stated that the standard deduction would be extended to the new tax regime.

4] LTA (Leave travel Allowance): The non- government workers are exempt from the leave encashment requirement. The limit is now Rs 25 lakhs.

5] No LTCG tax benefit on these Mutual Funds: Investments in debt mutual funds will be subject to short term capital gain tax beginning on April 1. Investors would lose the long-term financial advantage that had made such investment attractive.

6] Life Insurance Policies: With the start of the new fiscal year the proceeds from the LIC over the yearly premium of Rs 5 lakhs will be taxable.

7] Benefits to Senior Citizen: Senior Citizen Savings Scheme's highest limit will rise from Rs 15 lakh to 30 lakhs. The monthly income scheme's highest deposit limit will rise from 4.5 lakhs to 9 lakhs. for single accounts and from 7.5 lakhs to 15 lakhs for joint accounts.

8] Changes in Income Tax Slabs:

• 0-3 lakhs---------- Nil
• 3-6 lakhs---------- 5%
• 6-9 lakhs---------- 10%
• 9-12 lakhs--------- 15%
• 12-15 lakhs--------20%
• above 15 lakhs----30%

UPI transactions new rule from April 1:

 

Any Unified Payments Interface (UPI) transactions of more than Rs 2,000 made vis prepaid payment instruments (PPI) like online wallets or pre-loaded gift cards, etc, will carry an interchange fee of up to 1.1 percent from April 1, 2023.The interchange fee is typically associated with card payments and is levied to cover the costs of accepting, processing and authorizing transactions.

Will customers be charges for UPI payments?

No. The interchange charges introduced are only applicable for the PPI merchant transactions and there is no charge to customers, and it is further clarified that there are no charges for the bank account to bank account-based UPI payment (i.e., normal UPI payments). 

The move is said to be aimed at increasing revenue for banks and payment service providers, who are reportedly been struggling with the high cost of UPI transaction.  

- CA Neha Vora

Difference between Savings & Investing

 

• Most of us think Savings & Investing are the same thing. While the terms are often used interchangeably by many, but they are different.

 1. The difference between your monthly income       & your expenses is what constitutes as your           "Savings".

 2. When you multiply the money, you save by putting it in various investment classes such as Stocks ,Bonds, Mutual Funds, Gold, PPF, NPS or Real Estate, you are creating wealth by " Investing".

A] Benefits of Savings:

     1. Savings help you to meet short term goals such as going on a vacation or buying a gadget.

     2. Savings can be in the form of cash or in a bank account with very little or no risk involved having nominal rate of return.

     3. With Savings, you can meet your emergency needs by creating an emergency fund which helps you  at the time of an emergency.

B] Benefits of Investment:

    1. Savings invested in various assets categories earn you a substantial profit.

    2. Investing money helps you meet long term goals like buying a house.

    3.When you invest, there are some risks involved like fluctuating interest rates or other economic conditions that can lead to losses.

    4.  Investing money has the potential for profits that increase your net worth & help to buy wealth over time.

C] Advantages of Investment:

    1. Money kept in a safety vault though safe, but it does not guarantee you adequate returns to beat  inflation.

    2. Money invested in products like Stocks, MF etc. is subject to risk but has the potential to grow                over time.

    3. The aim of any investment is to beat inflation because with inflation the value of money decreases over time.

Hence, when you invest your aim should be to earn a return that is greater than the rate of inflation.

- CA Neha Vora

Consequences of non-linkage of Adhar PAN till 31st March 2023

 

1] CBDT has mandated all taxpayers to link their Adhar with PAN by March 31,2023. As per section 139AA of Income Tax Act 1961, every person eligible to obtain an Aadhar & has PAN must link their Adhar with their PAN by March 31,2023.

2] If taxpayer fails to link Adhar with their PAN by March 31,2023, then their PAN number will become inoperative. Taxpayers who have not yet linked their Adhar with their PAN can do so by paying a late fee of Rs 1,000/

3] Consequences of non-linkage of Adhar PAN till 31st March 2023:

a) Taxpayer PAN will become inoperative until linked with Adhar

b) TDS/TCS deduction will attract a higher rate applicable, since PAN has become inoperative 

c) Investors will not be able to carry out any transaction in NSE or BSE.

d) Assesses will not be able to do banking transaction such as booking of Fixed Deposit above Rs 50,000/- depositing cash above Rs. 50,000/- & obtaining a new Debit/ Credit Card.

e) Investors will not be able to Invest or Redeem their Mutual Funds.

f) Assesses will not be able to purchase any foreign currency beyond Rs. 50,000/-.

g) Taxpayers cannot file ITR or claim ITR refund with inoperative PAN. Pending returns will not be processed & pending refunds will not be issued to inoperative PAN. TDS/TCS credit will not appear in Form 26AS & TDS/TCS certificate will not be available. Taxpayers will be unable to submit 15G/15H declarations for Nil TDS.

- CA Neha Vora

3 Key Things to keep in mind when budgeting your Finances

1. Track your expenses: To create an effective budget, you need to know how much you are currently spending each month. Start by tracking your expenses for a few months to get a sense of where your money is going. You can use a spreadsheet, a budgeting app, or a pen and paper to track your expenses.

2. Set realistic goals: When creating a budget, it’s important to set realistic goals that you can stick to. Be honest with yourself about how much you can afford to spend on different categories, such as housing, transportation, food, and entertainment. Make sure to leave some room for unexpected expenses, such as car repairs or medical bills.

3. Review and adjust regularly: Your budget is not set in stone. It’s important to review your budget regularly and make adjustments as needed. For example, if you find that you are consistently overspending in one category, you may need to adjust your budget to reduce your spending in that area. Similarly, if you receive a raise or bonus, you may want to adjust your budget to allocate more money towards savings or debt repayment.

These are just a few key things to keep in mind when budgeting your finances. With a little effort and discipline, you can create a budget that helps you achieve your financial goals.

-CA Neha Vora 

Received an Income Tax Notice ?

Though we file our income tax return cautiously we do make few errors. After making such errors we all are concerned about the outcome of such errors. Once we upload our income tax return, the same is assessed by the Income tax department. After assessment the Income Tax Department issues Income tax Notices. In this article I am going to give a bird’s eye view on the types of notices issued and reasons of such issuance.

Notice u/s 139(9): When filing your income tax return, it is important to ensure that you provide details of all your income, deductions, investments. If the Income Tax Department finds any mismatch of information or mistakes in your tax return, it will send you a notice u/s 139(9), asking for proof/justification for the mistakes/mismatch. Failure to respond to the notice issued, the ITD can levy heavy penalties on you.

Notice u/s 148: You can get notice u/s 148 if the assessing officer has a reason to believe that your income which was chargeable to tax has escaped assessment. If he has material to support his belief, he will record his reasons in writing and send you a notice u/s148.

Notice u/s 245: This intimation is received when you have a tax demand pending from the IT department or when you have claimed a refund from them for some other assessment year. Section245 of the Income tax empowers the AO to adjust the refund against any tax demand outstanding from the taxpayer. In simple words, the IT department wants to adjust the refund due against a demand due from you. This demand may pertain to previous years.

Notice u/s 143(1): This intimation is received by the assessee when there are arithmetical errors, internal inconsistencies, tax and interest calculation errors, Tds mismatch etc. Reply to such intimations have to make in due time or else the return filed could be considered as in valid.

Notice u/s 143(2): If you get notice u/s 143(2), it means your return has been selected for scrutiny by the Assessing Officer. The notice might ask you to produce documents in support of deductions, exemptions, allowances, reliefs, other claims of loss you have made and provide proof of all sources of income.

Notice u/s 144: If the tax payer has not filed his Income tax return or has not replied to any of the notices issued by the department, then notice u/s 144 is issued. This notice informs the tax payer about his tax payable along with interest and penalty.

Notice u/s 142: In this notice the information of the bank statements, amount deposited, withdrawn, investment details as well as other transaction details are asked by the department.
      There is no need for the taxpayers to get worried after getting any of the notices, if a person understands these notices properly, then he will be less worried and can act correctly.
                

                                                                                          - CA Neha Vora